Kroger expands Pinterest tie-up with first-party data ad targeting

Kroger and Kroger Precision Marketing (KPM) announced an expanded partnership with Pinterest that enable advertisers to leverage the supermarket chain’s first-party data for targeting ads on the social platform and closed-loop measurement to track from digital inspiration to purchase, according to a news release.

Pinterest is a destination for many consumers looking for inspiration related to fashion, food and home-related topics. The KPM partnership with Pinterest will give brands the chance to better target these audiences at various stages in their product discovery and purchasing process by leveraging Kroger’s consumer data.

Faced with competition from Amazon and its growing ad business, retailers, like Kroger, Walmart and Target, are leveraging their vast amounts of consumer data, including their shopping habits and purchasing history, to attract advertisers with the promise of targeting their most relevant audiences. Kroger hopes to generate $400 million in additional profits by 2020 and sees its marketing unit KPM as playing a key role in that goal, since it places digital ads for companies like Unilever and General Mills, according to Bloomberg.

Pinterest has been rolling out new features to bring more advertisers to the platform and connect with its more than 250 million monthly users — mostly women, but fathers are a growing user group — with 78% saying brands’ content on the platform is useful to them, according to data from the company. Pinterest made its content marketing API available to third-party influencer marketing platforms, giving marketers and influencers the ability to collaborate more effectively.

Source: www.grocerydive.com

Trader Joe’s plans to cut plastic packaging in stores

Trader Joe’s is taking the fight against plastic to its 500 or so stores. The grocery chain announced that it is cutting back on plastic waste in the hopes of eliminating one million pounds of plastic from its stores as soon as possible.

The move comes following an online Greenpeace petition that was started late last year and signed by 91,000 people. Trader Joe’s read the room and jumped into action. It started putting some of its plastic-removing plans into effect late last year, announcing it would no longer offer single-use plastic bags to customers, replace the plastic produce bags and Styrofoam packages with compostable alternatives, and avoid using compounds like BPA in packaging.

That was just the beginning. To eliminate even more plastic that would otherwise just wind up in a landfill, the grocer is reducing how much produce it sells in plastic packaging. They will also replace Styrofoam trays with recyclable ones, use compostable, renewable sleeves on greeting cards, swap plastic sleeves and plastic flower bags with renewable ones, and eliminate non-recyclable plastic and foil from tea packaging.

According to EcoWatch, the grocery store described the changes as “better managing our environmental impact”—and the environment needs all the managing it can get. Each year, enough plastic is thrown away to circle the earth a whopping four times. Trader Joe’s new plastic-reducing efforts come as other corporate giants take very public steps to eliminate plastic and a slew of startups jump in the race to try and do away with this global problem.

 

Source: Fast Company 

Amazon’s New Supermarket Chain

The first preview emerged a few weeks ago when Amazon acknowledged that the Whole Foods “365” format would no longer exist. Later, it was further acknowledged that all 12 of those stores would be converted to the Whole Foods banner.

The 365 format was originally designed to offer shoppers an alternative to the more costly shopping trip to a Whole Foods store by offering product under the 365 private label that is priced below similar national brands. Clearly, it was an attempt to compete directly with Trader Joe’s and Aldi, both of which depend almost entirely on their own brands sold at low prices.

The explanation for the folding the 365 stores was that the price spread between Whole Foods stores and 365 had diminished to the point that 365 was no longer needed.

I think there’s a lot more involved than that. As I predicted in The Robin Report a little more than two years ago when 365 began, the concept was flawed and perhaps doomed to failure. That’s because food retail customers return to the store much more often than, say, department-store shoppers. Food customers know the prices of items they buy frequently.

Known Price Points

Therefore, while department stores and apparel-brand owners might prosper with outlet stores, often located away from their conventional stores, Whole Foods located its off-price offer near its main stores appealing consumers well acquainted with food prices.

To the minor extent that 365 stores offered better price points, they also implicitly shouted out that Whole Foods stores were overpriced. Not good marketing.

In any event, Amazon is now consolidating its Whole Foods stores into a unified whole, but that leaves a big hole when it comes to any sort of a low-price offer. That would seem to counter Amazon’s current strategy to appeal to lower-income shoppers. It already offers a lower-price Prime membership level to recipients of Medicaid and other public-assistance programs.

This is where the new supermarket chain comes in. The Wall Street Journal, the primary source about the new chain, stipulates that the first store will open in Los Angeles at year’s end with others to follow in San Francisco, Seattle, Chicago, Washington, D.C. and Philadelphia. It is worth mentioning that the WSJ’s news article has no identified sources, but it’s virtually certain that Amazon was involved in spilling the beans.

The new chain will begin in populated areas, as reported, and likely mimic Trader Joe’s and Aldi by mostly offering private labels – including Amazon’s own – at conspicuously favorable price points. Moreover, informed speculation has it that Amazon could acquire small grocery chains of a few stores each to facilitate expansion of the new chain. Publicity on that point will identify buying opportunities for Amazon.

Small Town, Big Opportunity

If it’s the case that expansion by acquisition of small chains is in the offing, it’s interesting to note that small grocery chains tend to exist in lightly populated areas. Both the chains are small and the stores comprising such chains are also small. That suggests that after Amazon’s new concept gets its footing in larger markets, it can be rolled out in less-populated places, for example in the plains states of the upper Midwest where no current Amazon store format would otherwise seem to fit. In sum, Amazon’s new supermarkets will give it a store fleet to appeal to cost-conscious customers and that will fit well into new territories, such as rural areas and small towns.

Incidentally, reports have it that the new supermarket chain is yet unnamed. If I were on Amazon’s board I would propose “Prime,” a name that Amazon already uses and that has a food-related meaning.

Finally, I’ll offer caution that much reporting about Amazon’s intentions is ill-informed, premature or nothing more than a trial balloon floated by Amazon to see how the competition reacts. So, the immediate eroding of equity values of heritage food retailers such as Walmart and Kroger that accompanied the news about Amazon’s purported intensions is doubtless premature, if warranted at all. As for other retail categories, far as we know, Amazon has no store-based ambitions beyond food and its own Amazon Books and 4-stars.

Source: The Robin Report

Amazon planning to launch new grocery chain

Nearly two years after Amazon acquired Whole Foods for $13.7 billion, a new supermarket chain could help the e-commerce giant sell more groceries to more people, gather valuable data and continue feeding its Prime loyalty flywheel.

Since its marquee grocery acquisition, Amazon has pushed down prices at Whole Foods stores in an effort to net more customers. But refashioning a store commonly known as “Whole Paycheck,” at which analysts noted prices were typically 15% higher than the competition, has proven difficult. Although Prime members get some special savings and more conventional brands have appeared in the aisles, reports have noted little to no change in the retailer’s average basket prices. Last month, The Wall Street Journal reported that Whole Foods prices are actually starting to creep up as suppliers battle inflation and other headwinds.

Although its exact positioning is unclear at this point, Amazon’s new chain will presumably be more in line with a traditional supermarket. It may lean toward a value offering popularized by discounters like Aldi and Lidl, which would allow Whole Foods to maintain its positioning toward the high end of the market while the new brand would reach a more mainstream audience.

“If I’m Amazon, I’m thinking of opening a store more conventionally driven, more price-oriented than Whole Foods,” said Neil Stern, senior partner with McMillanDoolittle, in an interview with Grocery Dive following Friday’s news.

Amazon acquired Whole Foods after struggling to grow its online food and beverage business, including its AmazonFresh brand. News of the new chain further proves that the e-commerce powerhouse needs physical stores in order to succeed in grocery, sources said.

“Grocery is still a store-based business. Amazon didn’t upend the grocery industry with Whole Foods, so now it’s taking matters into its own hands,” Matt Lindner, senior e-commerce analyst with Mintel, told Grocery Dive.

Amazon would use its new stores as distribution points for its growing grocery e-commerce business, WSJ reports. Same-day delivery through Whole Foods has reached more than 60 markets while store pickup touches more than 20. Both services offer an option for Prime members that waives the fulfillment fee — a move that addresses the price sensitivity many shoppers have toward online grocery shopping.

In addition to delivery from the unnamed new chain and from Whole Foods stores, Amazon’s physical footprint would allow it to build out AmazonFresh — which exited several markets back in in 2017 — and generally get food and beverage orders to shoppers faster and cheaper than before. Earlier this week, Amazon’s Happy Belly private label launched its first milk and dairy products, available only through AmazonFresh.

Perhaps most importantly, a conventional supermarket chain would offer yet another avenue for Amazon to collect consumer data and learn how to sell more cereal, produce, meat and other groceries to consumers. The company’s ability to adapt and learn — not to mention its $850 billion market cap — puts it in a class all by itself in the supermarket industry.

“Amazon grocery stores will certainly use their expansive shopper data to merge the in-store and online grocery experience,” Sylvain Perrier, CEO and president of grocery e-commerce provider Mercatus, wrote in comments emailed to Grocery Dive.

One big question mark in all of this is how Amazon would integrate its bleeding-edge technology into new stores. Whole Foods locations won’t see its cashier-free Amazon Go technology, company officials have said, but a new chain’s stores, at just 35,000 square feet, could be ideally suited.

For conventional grocers like Kroger and Albertsons, which haven’t yet seen their bottom lines impacted by the Whole Foods buy, this news signals a new competitive challenge. These chains have accelerated their rollout of store technology and online shopping, straining their profitability as they struggle to insulate their businesses.

A new grocery chain from the world’s largest e-commerce company could signal an even faster rollout of online and in-store innovation. If Amazon brings the same low-price strategy it employs online to the new stores, it could also mean even more heated price wars in crowded markets across the U.S.

“Amazon has that brand recognition and association in the mind of the consumer that if you shop online, you’re going to get the lowest price anywhere,” Lindner said. “If Amazon can bring that low price model to grocery chains, especially where the profit margin is so low, then it could be a game changer.”

Source: Grocery Drive

M&S and Ocado strike £1.5bn online grocery deal

Marks & Spencer has formed a £1.5bn online delivery joint venture with Ocado to bring M&S’s ready meals to internet shoppers for the first time.

M&S will pay £750m for a 50% share of Ocado’s UK retail business to form the new business, which will trade as Ocado.com. The venture will not start trading until September 2020 at the latest, when Ocado’s present deal to deliver Waitrose products expires. Only 10% of the products on sale at Ocado.com will be M&S-branded goods.

Steve Rowe, Marks & Spencer’s chief executive, said he had “always believed that M&S Food could and should be online” and combining M&S’s food with Ocado’s technology and delivery network was a “win-win” and “compelling proposition to drive long-term growth”. He added: “Our investment in a fully aligned joint venture with Ocado accelerates our food strategy as it enables us to take our food online in an immediately profitable, scalable and sustainable way.”

Tim Steiner, the chief executive of Ocado, described the deal as a “transformative moment in the UK retail sector” that would combine “two iconic and much-loved retail brands set to provide an unrivalled online grocery offer”. Steiner added also that the joint venture would allow Ocado to “grow faster, add more jobs, and create more value as we lead the channel shift to e-commerce here in the UK. We are very excited by the many opportunities ahead.”

Source: The Guardian

Sprouts executives pleased with growth in e-commerce and store brands

On the e-commerce front, Sprouts officials said they’ve begun trialing store pickup through Instacart at select stores. The service, which Instacart launched nationwide last year, complements Sprouts home delivery service through the e-commerce provider, now available at more than 200 of Sprouts’ 313 locations.

During yesterday’s earnings call, Nielsen said Sprouts will introduce a white-label platform in the second half of the fiscal year that plays up the retailers’ branding and offers a more “unified” experience for shoppers.

“We’ll also be able to get better content personalization offers to our customers and partner with our vendor community to put the right type of promotions out there in order to offset some of these costs,” he said.

The company also reported significant growth in its private label products last year. Store brand sales grew 26% growth year over year and now comprise about 13% of the company’s total sales.

While Sprouts appears to have beat fourth-quarter earnings expectations, the company’s guidance for 2019 has fallen short with investors. Still, Sprouts leadership remains optimistic about last quarter’s earnings and the direction of the company in the coming year, despite an uncertain end to 2018.

The unexpected resignation of CEO Amin Maredia in December led to the largest one-day drop in stock prices in the company’s history. Since then, interim co-chief executive officers Brad Lukow and Jim Nielsen have stepped up to run the business. During Sprouts’ fourth-quarter earnings call, the pair reported that a search is still underway for a replacement CEO.

“In 2018 we continued to evolve and improve the Sprouts business model by focusing on the latest consumer and industry trends,” said Lukow on the earnings call. “Our focus on product innovation, guest experience and ongoing training and development of our team members continue to underpin the success and growth of the Sprouts brand across the country.”

Lukow reiterated Sprouts’ plans to open nearly 30 stores in 2019, with nine store openings anticipated in the second quarter when the state enters New Jersey, Louisiana and Virginia. According to Lukow, this year about 50% of new stores will be in existing markets and 50% will be opened in new markets, while historically about 70% of new stores were placed in existing markets and 30% opened in new ones.

In addition to store growth, Sprouts has continued to roll out store remodels and is focusing heavily on expanded deli departments and more convenient meals, with remodeling completed at half of Sprouts’ locations. These new locations offer customers elevated deli offerings such as a salad bar, prepared meals and freshly squeezed juice, Nielsen said on the earnings call.

In its earnings press release, Sprouts announced that it has voluntarily reclassified certain expenses on consolidated statements of income presentation to provide greater transparency and enhance comparability with industry peers.

Source: Grocery Dive

Costco explores farming prospects in Hawaii

Hawaii may seem like a surprising choice for Costco to launch its in-house farm operation, but the potential move would give Costco greater flexibility and quality control over its supply chain while cutting down costs, Timothy Campbell, senior analyst at Kantar Consulting, wrote in an email to Grocery Dive.

Considering the logistics required to keep store shelves stocked with fresh produce and other items, it could go a long way toward reducing the brand’s supply chain expenses. Costco is already at a competitive disadvantage compared to Hawaiian retailers who don’t have to pay steep shipping costs to transport perishable goods, so the bulk retailer could shift the money it spends on shipping and logistics to set up shop in town.

By having a local operation, Campbell noted that Costco could cut out the traditional supplier and pass on savings to its customers. In addition, by having full control of the supply chain, the bulk retailer could be more nimble in when to shift what items it plans to stock in its stores instead of sticking to the typical top-selling products.

“Even if Costco’s major competitors in Hawaii also face a level logistical playing field, Costco may sense an opportunity to use its scale and establish a local source of goods that could further undercut the competition whereas the cost savings of such a move in another state would not be as great because it would naturally already be more logistically integrated with the rest of its sourcing network,” said Campbell.

Costco has seen demand for organic products skyrocket. The retailer has been the top seller of organic food products in the U.S. for several years, Campbell adds, making it unsurprising that it would be looking for a way to dig into the sector at the farm level, perhaps to ensure organic compliance.

This move could, however, create concern among local farmers as the large-scale corporation, with its deep pockets and ample resources, would likely be able to immediately outpace small farmers’ production capacity. As noted by KHON2, Hawaii Farmers Union United President Vincent Mina has already indicated his hope that Costco would collaborate with local farmers instead of displacing existing small-scale operations.

Costco has previously made other moves to shift some of its initiatives in-house. In 2018, the company brought the production of its rotisserie chickens in-house after sales experienced an 8% growth rate since 2010. By doing so, the company is projected to save the company 10 to 35 cents per bird. Having a reliable supply and more transparency in its supply chain were also motivating factors. The company also is currently building a large-scale chicken processing plant in Nebraska that will serve as the center of a farm-to-table production system for its $5 birds. Once finished, it will be capable of processing two million chickens each week to support sales, which sit around 60 million birds annually.

Surety and margin slashing are driving other retailers to take control over aspects of their supply chains as well. Kroger and Albertsons started investing in milk processing and bottling facilities in 2017, with Kroger processing all the fresh milk it sells in-store. Walmart also announced plans to open a large dairy plant in Indiana that produces milk products for nearly 500 of its stores.

Source: Grocery Dive

Walmart e-commerce sales grow 43%

Despite worrying holiday metrics recently reported by the Census Bureau, Walmart didn’t have a problem driving customers to its stores or website. CEO Doug McMillon said the company’s positive report is thanks in part to a favorable economic environment, as well as accelerated growth in a number of initiatives. E-commerce, for example, benefited from the expansion of its grocery pickup and delivery efforts as well as a broader online assortment, the company said.

The “blowout” earning report is thanks to a number of investments that are beginning to bear fruit, especially in grocery, Charlie O’Shea, Moody’s Lead Walmart Analyst, said in a statement emailed to Retail Dive. “Food continues to play a critical role, and Walmart is upping the ante with its investments in this category, putting additional pressure on the entire category,” O’Shea said, adding that he anticipates 2019 will be a year of muscle flexing across multiple categories.

Many analysts are encouraged by Walmart’s growth online, which signals it may have enough competitive strength to compete against Amazon.

“Walmart has been successfully executing its online-forward strategy, laying down aggressive e-commerce growth targets and making some savvy geographic expansions and acquisitions across key verticals, like specialty apparel and grocery,” Michael Lagoni, CEO of retail intelligence firm Stackline, said in comments emailed to Retail Dive.

Last year, the company focused a large portion of its e-commerce efforts on grocery, which, as of December, accounts for 52% of Walmart’s sales. The retailer’s grocery pickup service is available at 2,100 stores — more than double what it was in 2017 — and will expand to 3,100 stores by the end of this year.

Its grocery delivery service launched in March of last year and has been expanding since. Along with its own delivery platform the retailer is partnered with many delivery service providers including Point Pickup, Skipcart, AxleHire, Roadie, DoorDash and Postmates. In addition, Walmart has been testing autonomous grocery delivery by partnering with electric and driverless car company Udelv in Phoenix and Ford in Miami. This was after its first driverless car test with Alphabet’s Waymo, which picks up customers and brings them into stores.

By offering a variety of e-commerce options, the retailer is hoping to attract new customers. Through its recent Jet.com website refresh, Walmart has zeroed in on wealthy, urban millennials. It’s not clear whether that message is resonating, but it does show that Walmart is bulking up to compete on Amazon’s turf.

Source: Grocery Dive

New grocery store with drive-thru pharmacy and eatery opening in Cleveland’s Midtown neighborhood

CLEVELAND — Dave’s Market, a grocery store that’s been a household name in Cleveland for nearly 90 years, is opening a new location in Cleveland’s Midtown neighborhood, according to a release from the company.

The new market, located at 1929 East 61st Street, will feature a food court style eatery with access to fresh food options.

The 55,000-square-foot market and eatery sits northeast of University Hospitals Rainbow Center for Women and Children, along RTA’s Healthline route.

Among the features in the market, there will be a food court style eatery with lunch and dinner options, as well as takeout, featuring hand-rolled sushi, Cleveland’s Maha’s Falafel and Japanese hibachi. Also, customers can still get the classics from Dave’s such as fried chicken and subs.

Inside the space, Dave’s and UH are partnering to create a teaching kitchen, which will serve as an instructional space where organizations across the city and general public can host classes and events focused on healthy eating.

A drive-thru pharmacy will provide convenience, along with a First Federal of Lakewood bank branch opening in the spring.

The new grocery in Cleveland’s Midtown neighborhood is one of many stores that Dave’s Market has built over the years. Tracing its roots back to 1930 with the location on Payne Avenue. Burt Saltzman, a third generation grocer, along with his two sons Dan and Steve, grew the business to 14 stores throughout Northeast Ohio, according to the release.

The Payne Avenue location will close its doors on Sunday, Feb. 24 before the opening the new location on East 61st Street, according to a spokesperson for Dave’s.

Dave’s is in the process of finalizing a transportation plan for customers from its former Payne location to the new store. The shuttle will pick up residents at two locations in the neighborhood and will take them to the new location where they will have an hour to shop. It’s unclear at this time where those two locations will be, but a spokesperson for the market says they will relay the information to its customers.

The store will open at 10 a.m. on Feb. 27. The market and eatery will open daily 7 a.m. to 9 p.m.

Source: News5cleveland

Insurance company pilots meal delivery program

As studies begin to solidify the link between food and well-being, more companies like BCBS and HCSC are experimenting with how to provide nutritional meals that can help people who struggle with certain illnesses.

BCBS’ partnership with HCSC — the fourth largest health insurer in the U.S. — isn’t the institution’s first foray into meal services. It partnered with Platejoy in February of 2018 to offer a diabetes-focused meal plan that is covered by five of its health insurance plans. HCSC also jumped on the meal delivery bandwagon as part of its Affordability Cures program, which it created to address the root-level issues in America’s health care system that can often lead to crushing medical debt for many patients.

A few other companies are dabbling with prescription-focused meal kits. San Francisco-based Sun Basket added Dr. David Katz as its chief science advisor to create what it describes as an “online food-as-medicine platform” connecting dietary and health needs to food. Celebrity chef Tricia Williams and New York City-based Dr. Frank Lipman launched Be Well Eats, offering grain-free, dairy-free organic meals focusing on adaptogenic herbs and backed by a team of certified nutritionists. Users still have to cook the meals from either outlet, however.

What’s notable about foodQ, however, is its affordable cost and convenience. The $10/month subscription package includes delivery of ready-to-eat meals. For patients with chronic illness, making drastic changes to their diets can be one of the biggest challenges. Prepared meal services take the guesswork out of food shopping, prep and cooking.

The meal delivery program also looks to broach the problem of food deserts, which are places that lack access to fresh food. Often, the most easily accessible food are high in cholesterol, sugar and fat, while any available produce is sold at a higher cost. There were roughly 2.3 million Americans living in a food desert in 2016, according to the Nonprofit Quarterly. Delivering prepared meals right to users’ doorsteps helps overcome food desert dwellers’ logistical challenges.

While some may be surprised to see the pilot focusing on major metropolitan cities like Dallas and Chicago, food deserts aren’t always in the middle of nowhere. A lack of reliable transportation to fresh food markets, economic blight and other factors can create food deserts even in metropolitan areas.

Source: Grocery Dive